Greystone Elementary music teacher Sara Womack, who was named the Hoover school district's Elementary Teacher of the Year in January, gives a high-five to a student in one of her music classes on Jan. 18, 2013. (Frank Couch/fcouch@al.com)

HOOVER, Alabama - Hoover schools Superintendent Andy Craig on Monday night affirmed the school district's commitment to offer competitive pay and perks for employees even as the system seeks to contain costs to avoid future operating deficits.

On Monday night, the message was less dire for school employees, though Craig did not specifically say that employee pay cuts were off the table. Paying careful attention to his words, Craig read directly from a memo he had written to the school board.

"The evaluation of cost containment strategies will continue to grant strong unwavering deference to policies, procedures, and practices that position Hoover City Schools to attract, employ, retain and support the best educational personnel," Craig said. "To be clear, I consider competitive compensation and policies such as ours that allow employees' children to attend Hoover City Schools to be vital components of success for the school district."

Hoover has about 250 students who are allowed to attend Hoover schools only because their parents are employees of the district, Craig said last month.

The school district also employs 176 more teachers than the state funds, and some of those jobs may have to be eliminated, Craig said last month. He did not comment about job cuts Monday night.

Growing enrollment and sharply declining revenues have weakened the school system's funding model and eroded its ability to invest in core teaching and learning, Craig told the school board.

Enrollment has increased by 1,065 students over the past four years, from 12,817 four years ago to 13,882 this year, according to a memo Craig gave the board.

Over the same time, revenues from the school system's primary revenue streams have fallen by $1.6 million from $151,324,596 in fiscal 2010 to an expected $149,730,569 in fiscal 2014, records show.

Expenditures have increased by nearly $4.2 million in that time, from $162,878,334 in fiscal 2010 to an expected $167,048,353 in fiscal 2014.

Some of that spending was related to capital projects, but the school system has been running deficits in operating funds for most of those years.

"Despite implementation of cost-cutting measures, we still face operating deficits," Craig told the board. "Going forward, our approach to deficit reduction and balancing revenues and expenditures will be multi-faceted. We plan to work through appropriate channels and processes, including the City of Hoover's administration, to identify potential incremental revenues to strengthen the school system's operating position. Also, our efforts will continue on a multi-functional basis to evaluate and implement cost containment strategies."

To help insulate the school district from the potential harmful effects of year-to-year school funding uncertainties, the school system needs to keep at least three months' worth of operating expenses in its fund balance, Craig said. That means at least 25 percent of its annual expenditures, he said.

Craig said he expects to take three to five years to reach a balance of revenues and expenditures in the school district's operating funds.